Sourcing Opportunities In Egypt

Land of the pyramids…

Home to the

Nile River… Home to the Nile River…

There is a lot more to Egypt than just the Nile and the Sphinx

……as beautiful as they are

Land Area 1 Million KM2 100 Million People

------------- Labor Force

29 Million

Total Garment Industry Output

$2.7Billion Textile & Garment Workers

1,500,000

% of Garment Production Exported to the U.S.

Textiles & RMG sector plays an extremely important role in the Egyptian

Economy:

• Second biggest industry after agro-industry

• First sector in terms of labor force

• Accounts to 3.5% of GDP & almost 34% of industrial output

Source: CIA – World Fact book

Why Egypt?

•Investment/Product diversity •Supportive infrastructure

•Established competitive advantage

Textiles

Technology

Centers

Vertically

Integrated

Factories

Advanced

Testing

Labs

Investments Diversity

Cotton production

Yarn making

Spinning

Weaving & Knitting

Dyeing

Ready-made garments

Egyptian

Knitted

Products

• All kinds of single Jersey fabrics in all weights, starting from 90 grams x sqm until 260 grams (100% cotton or cotton blends): • Single Jersey w/Lycra • Pique • Pique w/Lycra • All kinds of Rib: 1x1; 2x2; 2x1 • Yarn dyed stripes • Fleece • Fleece Lycra

Egyptian

Woven

Products

• All kinds of products (100% Cotton):

• Twill

• Canvas

• Denim

• Non-Denim

Advanced testing labs & technology centers

Egypt’s Air Cargo Airport, located in Cairo,

currently has 5 cargo terminals

15 commercial river/sea ports

A well-established network of railways &

roads

Main Egyptian Ports

Capacity (million ton/year)

Alexandria 37

El-Dekheila 22

Damietta 20

East Port Said 13

Port Said 12

Suez 7

El-Sokhna 9

Adabiya 8

Total 128 Source: Egyptian Maritime Data Bank (year 2010)

Fabric from Far East

120 days

Fabric from Turkey

90 days

Fabric from Egypt

75 days

One of the competitiveness of the Egyptian Garments industry for exports is social compliance.

• Responsible textile product manufacturers, sourcers, brands, and retailers take consumer product safety compliance very seriously.

• Globalization and increased consumer awareness has put more responsibility on companies to ensure that the goods they sell are made in safe working conditions, at fair rates of pay and respecting the basic human rights of those involved in production.

Certifications:

- Most of the Egyptian Factories are certified Wrap

- Most of the Egyptian Factories are certified ISO

- Some factories are certified OEKO-TEX

Better Work pilot in Egypt

From July to December 2017, Better Work is implementing a pilot of its services in approximately 30 factories, primarily in Egypt’s garment export sector, to improve working conditions and boost business competitiveness.

Established at the request of the Government of Egypt, the pilot will engage the government, manufacturers and their associations, all trade unions, international apparel brands and their suppliers.

At the end of the pilot. The ILO and the IFC will assess the success of the pilot with stakeholders and determine the potential for Better Work to contribute to better working conditions, stronger social dialogue and competitiveness in the sector, including the enabling legal and policy conditions to achieve these outcomes

Total RMG Exports in 2017increased by 14% compared to the same period in 2016, due to increasing RMG Exports to US by 15% and to Europe by 14% .

14%

Top Ten Exporting Companies To US In 2017

Top Ten Exporting Companies TO Europe In 2017

1-Lotus Garments.

2-Alex Apparels For Readymade Garments

3-Giza Spinning & Weaving Co.

4-T & C GARMENTS

5-Jade-Apparel-Industries

6-Lotus High TECH Garments

7-Embee International Ind

8-Firestone Apparel Factory

9-Delta Textile Egypt Factory

10-C R S Denim Garments Egypt

1-Swiss Garment Company

2-Eroglu Egypt

3-Dice Sport And Casual Wear Factory

4-Eurotex for Garments

5-C R S Denim Garments Egypt

6-Velocity Apparelz

7-Jade-Apparel-Industries

8-Espranto Jeans Co.

9-Plaza Ready Made Garments Ind.

10-Iemco Garments Company

Commentary For 2017 Numbers: RMG Exports increased to Spain , Italy, France ,UK by 30%,31%,17%,5% respectively for 2017 compared with 2016 . Also RMG Exports increased to Saudi Arabia , Kuwait by 45% ,5% respectively for 2017 compared with 2016 .

Egypt has the Lowest cost of Electricity 4 cents/kwh

Comparative Advantages for RMG Industry Egypt has enjoyed a revealed comparative advantages in textiles and RMG for its Great capabilities for mass production with key strengths in denim ,jersey knitting ,weaving ,casual and sportswear,15 established ports (including Alex & portsaid), Preferential agreements with USA ,Eu (duty free) and its Strategic Location.

US + Israel

(QIZ) EU 27

EFTA

COMESA

PAFTA Arab Bilaterals

Lebanon – Syria – Iraq – Tunisia – Morocco - Libya

Agadir

MERCOSUR

Russian Federation

QIZ Protocol Egypt – Israel – United States

EU Association Agreement (EU

27) FTA

Austria – Belgium – Bulgaria – Cyprus – Czech Republic – Denmark – Estonia – Finland – France – Germany – Greece, Hungary – Ireland – Italy –

Latvia – Lithuania – Luxemburg – Malta – Netherlands – Poland – Portugal – Romania –

Slovakia – Slovenia – Spain – Sweden - UK

EFTA FTA Egypt – Iceland – Liechtenstein – Norway –

Switzerland

PAFTA FTA

Algeria – Bahrain – Egypt – Iraq – Jordan – Kuwait – Lebanon – Libya – Morocco – Oman –

Palestine – Qatar – Saudi Arabia – Sudan – Syria – Tunisia – UAE – Yemen

COMESA FTA

Burundi – Comoros – Congo – Djibouti – Egypt – Eritrea – Ethiopia – Kenya – Libya – Madagascar

– Malawi – Mauritius – Rwanda – Seychelles – Sudan – Swaziland – Uganda – Zambia -

Zimbabwe

Agadir FTA Egypt – Morocco – Tunisia – Jordan

SADCC FTA

Southern African Development Community including 15 Southern African States (Angola,

Botswana, Congo, Lesotho, Malawi, Madagascar, Mauritius, Mozambique, Namibia, Swaziland,

Tanzania, Zambia, Zimbabwe, South Africa and Seychelles)

UEMOA FTA West African Economic and Monetary Union (Benin, Burkina Faso, Cote d'Ivoire, Guinea-

Bissau, Mali, Niger, Senegal, and Togo)

Mercosur FTA Egypt and Mercosur states (Brazil, Argentina,

Uruguay and Paraguay )

Egypt is a Member in 9 Trade Agreements

Duty Free No Expiration No Fabric Restriction Stress Tested & Passed! Nearly $8.6 Billion in Total QIZ Exports Est. $730 MM in 2017Exports Over 700 Certified QIZ Factories 15 Designated Zones New Zones being added Flexibility in Israeli component use

Polo Ralph Lauren Levi’s PVH GAP Inc. Timberland Liz Claiborne DKNY Calvin Klein VF Warnaco Jones Of New York Sears Target Stores Fruit of the Loom JC penney Macy’s ONE JEANSWEAR Group

Wal-Mart K-Mart Banana Republic Jones Jeanswear Group Inc. Brook brothers PEERLESS COLUMBIA UNDER ARMOUR

Inditex Group (Zara – Stradivarius – Massimo Dutti – Lefties)

Marks&Spencer Next H&M Primark Tchibo Abanderado Tim New Look C&A Debenhams

Decathlon Benetton Tesco George BHS Valentino Armani

Why Egypt?

Clear sector strategy until 2025 Increased investments upstream Corporate social responsibility Road Map to Democracy

Egypt to become the leading exporting MENA country in the Textiles industry, focusing on high

and medium value added products catering to the world’s largest retailers and manufacturers with

reliable and agile delivery.

V. Strategic Objectives

Creation of 1 Million New Job Opportunity

Train 750,000 Workers, Supervisors and Managers

Increase exports to achieve USD 10 Billion

Attract local and Foreign Investments of USD 13.5 Billion

Increase the Value-Added to 70% of locally manufactured raw materials

VI. Strategic Focus

Expanding the Industrial Base through Developing and Enhancing the Competitiveness of local

industry

Backward Vertical Integration of Industry, promoting investments into primary textiles and fiber

production

Foster Export’s growth and market entry

Focus on Human Capital Development

Reform of Government policy

Upstream

•Yarn

•Fabrics

•Dying and finishing

Downstream

•Garments

•Home textiles

•Accessories

”Your Job Next Door Initiative “ Contributing to the development of Upper Egypt through introduction of garment production unites in small villages, The idea is creating small production unites in rural areas and areas where the unemployment rate is high, each unit will be adapted and supported by the big manufacturers in terms of quality, management, know-how and training as well as orders will be given to these unites to ensure their sustainability for 2 years, the main aim is creating a level of youth entrepreneurs and new job opportunities

The first phase of the project included the establishment of 12 production units in Qalyoubia Governorate. Eight units are up and running since September 2016, providing 1,000 direct jobs and 4,000 indirect ones. The production capacity of these units is between 60 - 70 thousand pieces per month per unit.

On the other hand, RMGEC signed protocol with the Governor of Kafr El-Sheikh last May to create another pilot of the initiative which will be adopted by borg El Arab garments factories, which aims to establish 8 units of production, to provide job opportunities in rural areas beside their homes .

”Support of New Textile city in Menya

• (200km south of Cairo)”

• New Textile city aims to reach Egyptian exports of textile products to 10 billion dollars by 2025. It includes all industries of yarns, textiles, dyeing and ready-made garments, in order to achieve industrial integration of Supply chain in the textile industries, and attracting many foreign investments.

“RMGEC and Textile Export Council Signed Memorandum of understanding with L ’Union des Industries Textiles UIT –

France”

On the 12th of November 2017, RMGEC & Textile export council signed MOU with UIT to enhance and

promote bilateral trade and industrial cooperation in the textile & fashion sector.

“RMGEC Export Council Signed a cooperation protocol with Confederation of Tunisian Citizen Enterprises CONECT– Tunisia”

On the 20th of December 2017, RMGEC export council signed cooperation protocol with Confederation of Tunisian Citizen Enterprises “CONECT “in Tunisia to enhance and promote bilateral cooperation in the field of foreign exhibitions and exchange of technological expertise in the

apparel and fashion sector.

Supporting Small Medium Enterptises “Joint Cooperation with upcoming USAID project TO”

Ready Made Garments Export council organized a meeting between

number of SMEs companies and Chemonics Int. (one of the largest USAID

consultants and project executors) to gain insights into the technical

assistance or other needs to grow their exports.

Destination Africa 2nd Edition November 2017

Following the success of the Pan-African

B2B textiles sourcing event in 2016, Destination Africa 2017 in its 2nd Edition Succeeded to attract 72 Egyptian and African manufacturers, 205 international buyers from Top international Brands like Guess - Koton – Hugo Boss - Croccodillo - Perry Ellis – LPP - Li & Fung - Jerry Leigh - Cricket & Co – Pimkie - Haggar - Spring Near – VF – PVH – KIK - G Star with anticipated sales of $50 M .

Destination Africa Sourcing Event aims at strengthening the African industrial links to achieve the vision of the state in making Egypt a regional center for international trade and the main gateway to the African market and sustaining integration of the textile African supply chains.